TDS Rate for financial Year 2010-11/ Assessment year 2011-12 and Amendment made by union budget 2010

Increase in thresholds limit of deduction of tax from various payments

This bill proposes to increase various thresholds limit for deduction of tax from various payments like Winning from Lottery or Crossword Puzzle, Winning from Horse Race, Payment to Contractors, Insurance Commission, Commission or brokerage, Rent, Fees for Professional and Technical Services. The proposed amendments w.e.f 1st July, 2009 made under the new provision are summarized as under:

(Amounts in Rs.)

Section

Nature of Payment

Existing

Proposed

194B

Winning from Lottery or Cross word puzzle

5,000

10,000

194BB

Winning from Horse Race

2,500

5,000

194C

Payment to Contractors [per Transaction]

20,000

30,000

194C

Payment to Contractors [Annual Limit]

50,000

75,000

194D

Insurance Commission

5,000

20,000

194H

Commission or Brokerage

2,500

5,000

194I

Rent

1,20,000

1,80,000

194J

Fees for Professional and Technical Services

20,000

30,000

Consequences of failure to deduct tax, or after deducting failure to pay tax deducted/tax collected at source u/s. 201(1A)

Under the existing provision of section 201(1A) of the Act, where the person does not deduct the tax or after deducting fails to pay the tax, he is required to pay simple interest at the rate of 1% for every month or part of the month. Amendments are proposed to treat the cases of failure to make payment, after deducting the tax at source more severally then the cases of pure failure. The proposed amendment to this section w.e.f. 1st July, 2010 has increased the rate of interest in cases of failure of payment after deduction to 1 1/2% for every month or part of the month till the date on which such tax is actually paid. The rate of interest will remain same at one percent for the cases of actual default of deduction of tax itself.

Certificate for tax deducted or collected u/s. 203 and u/s. 206C

The tax department was proposing to grant the credit of tax at source under their Online Tax Accounting System (OLTAS), completely obviating the necessity to issue certificate of deduction of tax at source and furnishing the same with the tax returns. Accordingly, the Finance Act, 2005, section 203 and section 206C(5) were amended for abolishing the requirement for issuance of the TDS and TCS certificate.

Considering the practical difficulties being encountered, the earlier procedure of issuance of TDS/TCS certificate has been restored.

TDS RATE FOR THE ASSESSMENT YEAR 2011-2012 (in %)
(TDS rates with effect from 1st April 2010)

Section

Natureof Payment

Threshold
limitupto
30th June,
2010
(in Rs.)

Threshold
limit w.e.f.
1st July,
2010
(in Rs.)

Individual/
HUF/ BOI/
AOP

Firm

Co-
operative
Society /
Local
Authority

Company

192

Salary

As per slab

As per slab

Normal Rate
(incl. cess)

N.A.

N.A.

N.A.

193

Interest on Securities

(1) Interest on Debentures or Securities (Listed)

2500*

2500*

10.00

10.00

10.00

10.00

(2) Interest on 8% Savings (Taxable) Bonds, 2003

10000

10000

10.00

10.00

10.00

10.00

(3) Any Other Interest on Securities (Unlisted)

0

0

10.00

10.00

10.00

10.00

194

Dividend other than dividend covered by Section 115-O

2500*

2500*

10.00

10.00

10.00

10.00

194A

Interest other than Interest on Securities (other than below)

5000

5000

10.00

10.00

10.00

10.00

Where the payer is

(1) Banking Company

10000

10000

10.00

10.00

10.00

10.00

(2) Co-operative Society engaged in banking business

10000

10000

10.00

10.00

10.00

10.00

(3) Post Office (deposit scheme framed by Central Government)

10000

10000

10.00

10.00

10.00

10.00

194B

Winning from Lotteries

5000

10000

30.00

30.00

30.00

30.00

194BB

Winnings from Horse Races

2500

5000

30.00

30.00

30.00

30.00

* in case of resident only

194C

Payments to Contractors

(1) In case of Contract/ Sub-Contract/ Advertising

20000 (Note 1)

30000

1.00

2.00

2.00

2.00

(2) Contractor/ Sub-Contractor in Transport Business

20000 (Note 1)

30000

NIL( Note 2)

NIL (Note 2)

NIL(Note 2)

NIL(Note 2)

194D

Insurance Commission

5000

20000

10.00

10.00

10.00

10.00

194E

Non-Resident sportsman/ sports association

0

0

10.00

10.00

10.00

NA

194EE

Deposits under NSS to Resident/Non-Resident

2500

2500

20.00

20.00

20.00

NA

194F

Repurchase of Units of Mutual Fund/UTI from Resident / Non-Resident

0

0

20.00

20.00

20.00

NA

194G

Commission on Sale of lottery tickets to Resident / Non- Resident

1000

1000

10.00

10.00

10.00

10.00

194H

Commission or Brokerage to Resident

2500

5000

10.00

10.00

10.00

10.00

194I

Rent to Residents

(a) Rent for Machinery/ plant/equipment

120000

180000

2.00

2.00

2.00

2.00

(b) Rent for other than in (a)

120000

180000

10.00

10.00

10.00

10.00

Note:-1. This limit is for individual transaction. However, if aggregate payment to a contractor during the year exceed Rs. 50,000 (Rs. 75,000 w.e.f 1tst July, 2010), then tax will be required to be deducted, even where individual transaction is less than the threshold of Rs. 20,000 (Rs. 30,000 w.e.f. 1st July, 2010).2. The Nil rate will be applicable if the transporter quotes his PAN. If PAN is not quoted the rate will be 20%. (Transporter means persons engaged in plying, hiring and leasing of Goods Carriages)

194J

Fees for professional / technical services to residents

20000

30000

10.00

10.00

10.00

10.00

194LA

Compensation to Resident on acquisition of immovable property

100000

100000

10.00

10.00

10.00

10.0

195

Payment of other sums to a non-resident

0

Rate specified under Part II of First Schedule of Finance Bill, 2010 subject to provisions of DTAA

196B

Income from units (including long term Capital Gain on transfer of such units) to an offshore fund

0

0

10.00

10.00

10.00

10.00

196C

Income from foreign currency bonds or GDR of Indian Company

0

0

10.00

10.00

10.00

10.00

196D

Income of FII from securities not being dividend, long term and short term capital gain

0

0

20.00

20.00

20.00

20.00

Note:

In order to strengthen the PAN mechanism, it is proposed to make amendments in the Income Tax Act to provide that any person whose receipts are subject to deduction of tax at source i.e., the deductee, shall mandatorily furnish his PAN to the deductor failing which the deductor shall deduct tax at source at higher of the following rates:

(i) the rate prescribed in the Act;

(ii) at the rate in force i.e., the rate mentioned in the Finance Act; or

(iii) at the rate of 20 percent

The above provisions will also apply in cases where the taxpayer files a declaration in form 15G or 15H (u/s 197A) but does not provide his PAN. Further, no certificate under section 197 will be granted by the Assessing Officer unless the application contains the PAN of the applicant.

TCS RATE FOR THE ASSESSMENT YEAR 2011-2012 (in %)
(TCS rates with effect from 1st April 2010)

231 Responses to “TDS Rate for FY 2010-11/ AY 2011-12 with Amendment”

Dear Sir,
For the finical year 2010-11, as per the 194c, if pan No. is provided by the transporter.no TDS deducted, is there any other condition that the transporter should not have more than 10 vehicles.

I am currently working with a software company in Pune as a salaried employee.

I have brought in a project in my previous company that was for 1 year contract with the client. So based on monthly payment company receives from client, I receive the commision accordingly on monthly basis.

THis is regarding TDS on professional charges. We have received 3 bills from our company secretary. Total value from 3 bills is Rs.31,100/- (as per my knowledge TDS need not be deducted upto 30000) Should I deduct TDS on Rs.31,100 or Rs.1,100?

Respected Sir,
If we have to make a single payment in a year to a transporter of Rs. 16,000/- and he is not having Pan no. then should i deduct tds or not ? My confusion is that whether a transporter should have PAN no in all cases or else only if his total payments exceeds Rs 75,000/- in a year.

Sir,
I am working in a state govt.managed project known as RASTRIYA MADHYAMIK SHIKSHA MISSION at Bhubaneswar of ODISHA. As per order of Secretary of Odisha Govt. Being the chairman of our society, renovation work of our office has been made of amount Rs.25.00lakhs through departmentally. now my question is wheather we will deduct TDS ON CONTRACT AS some portion of work has been done through subcontractor.

I offer professional web marketing services to a client under a company name(PVT LTD) and used to collect monthly amount of Rs.25000/-. Now i want to take these monthly payments on my Individual name.
Could you please let me know, how to approach the client for change of Account and in which Tax section i will be in ?

Fees for professional / technical services to residents is exemptable under 194J upto 20000/- proposed is 30000/-. In this regards, who is called as a professional. Managers above grade is treated as a professional ??

Q. We are running a school. our landlord is a NRI and we have to pay annual rent about Rs.158000/- in the current FY2011-12. As per sec.194I of the ITAct’1961 TDS on rent paid to resident-individual should be deducted @10% if total rent exceeded to Rs.180000/- per annum ..and @20% in the case of Non-PAN.
Please suggest-
a) what should be the TDS rate in the case of NRI-(Individual) with valid PAN or Non-PAN too ?
b) further, please also clarify what is the threshold limit for tds deduction reg. payment of rent to NRI. Is it the same as mentioned in sec.194I or zero (no minimum limit) ?
c) Is any difference of TDS rate…. if you find any provision in ADT with USA / Canada in such type of payment.

some of the institutes are deducting 10% tds on contracts. The contractors who are involved in services like construction of roads, construction of building, establishment of power grids & other civil nature of work are being deducted TDS @ 10% from their bills. It is correct or it is not. If it is correct why u/s 194 (C) the rate for contract is shown as 2% only.

Pls let me know the % of tds to be paid at source for Company for payment of sewerage amount for the financial year 2011-12 Assessment Year.and Can u please tell me in the construction field which is the deduct from the TDS & what is the percentage.

during partition of india / pakistan in 1947 muslim population was forced to leave india. they left behind their immovable properties. the authorities in jammu and kashmir set up a department, administered locally, (kept out of state exchequer) to monitor and maintain these properties. this department receives rentals from the authorised occupants of these properties ( land, shops, buildings, houses). is this rental income taxable. which section of income tax act does apply here.

while submitting the e filing (ITR 1) my name given was wrong. however PAN number, amount etc were all correct. I could not file the Revised Return since the system (IT) does not accept Revised return sunder section 139(1). Please advise.

i am service in bank, my question is , customer invest amount in STDR Capital gain schme and no TDS is tobe deducted on it,
Query: Whether TDS is to be deducted(capital gain scheme) on the amount of interest or it is to be exempted because capital gain scheme amount is exempt.
customer want TDS examption certificate, can i given certificate(under which sec.of it laws). pl advise any printed format availabe.some deposits of Motor excident claim tribunal office and other govertment offices(i.e.police,court etc) their own funds (No PAN No.is given) can exampt of TDS.

I have got my TDS from my organisation but since I swapped my organisation in last Assessment year and although i submitted my form 12B there was a error in TDS which hot deducted . So I have to pay an additional amount . Can this be declared in my organisation for deduction in next assessment year or I have to pay it now . If i have to pay it now , I see many option like advance tax, self assessment etc category so in which category i should pay the remaining amount

NO,the property constitute two parts, each owned by the separate individual, hence the rent received by each individual is bellow the thershold limit of Rs.180000/. There fore TDS is not tobe deducted.

whether TDS on rent in case of joint property where the owner of the property is 50-50%, and if the the combined rent exceeds the ceiling but not the individual rent, in that case is it necessary to deduct TDS on rent at source. Eg. if the total rent received by the joint landlords is Rs.18500.00 per month, do we have to deduct tax on rent at source during the current financial year i.e. 2011-12.

we are taking a scorpio from a private party for travelling purpose of our company pesons for this every month we are paying 25000/- so at end of the year how i will be calculate the tds amount and in which nature i will pay it to the govt please say me immedialty

We are hiring a scopio vehicle from a individual person for this we are going to pay every month rupees 25000/- so please say me how i will calculate the tds and in which nature of payment i will deposit this amount.

is there any one using tally.erp9 release3, if any one is there, please help for passing one entry for payment to contractor because i want to take all the reports which are related to tds from tally only. One confusion am facing when am selecting a particular party i.e. A and at deducteee type what option i have to choose (he is a tranporter and having pan card ) i tried to call that transporter and asked whether there firm is partnership he said no. what is company deductee type

is there any one using tally.erp9 release3, if any one is there, please help for passing one entry for payment to contractor because i want to take all the reports which are related to tds from tally only. One confusion am facing when am selecting a particular party i.e. A and at deducteee type what option i have to choose (he is a tranporter and having pan card ) i tried to call that transporter and asked whether there firm is partnership he said no. what is company deductee type

If a contractor’s 1st bill amounted to Rs. 20000/- & then 2nd bill amounted to Rs. 30000/-. Then the TDS should be charged on Total of Rs. 50000/- or on Rs. 30000/- only ?.
And also if 1st bill amounted to Rs. 20000/- & then 2nd bill amounted to Rs. 30000/- & 3rd bill amounted to Rs. 20000/-. Then the amount of TDS should be what ?

As u r a insurance agent u r providing services of selling of insurance policy on behalf of the company.so u r the service provider to the co.so u r liable to collect Service tax from the company and deposite the same to the credit of central govt.but in case of insurance agent the co himself pays service tax liabilty so u r not required to pay service tax any more.

As the single payment does not exceed Rs 20000( Rs 30000 from 1st july,2010) and Rs50000 yearly( 75000 w.e.f. 1st july 2010)it is not subject to tax deduction u/s194C. so the tax is not deductible at source.

Under payment to Contractor/ Sub-Contractor in Transport Business. if the freight amount is Rs. 15000 in single transaction and the transporter is not having PAN No. then is it mandatory to deduct TDS and what will be the situation if the payment to same transporter for the whole year is below 75000.00.

Sir, to avail the tax exemption from house rent weather i can submit the rent slip for 180000 as the thrshold for the rent has been increased to 180000 from 120000 for the fy 2010-11 because my salary is in the slab of 30% or can submit the rent slip of 15000 from july 11 onwards only without falling in tds on house rent

I HAVE STUDIED TAXATION FROM TAXMANN STUDENT’S GUIDE ASSESSMENT YEAR 2010-2011. NOW MY SCORE WAS 52 IN NOV’10. BUT MY GR. IS NOT CLEARED. FOR TAX SHALL I BUY THE TAXMANN STUDENT’S GUIDE ASSESSMENT YEAR 2011-2012

Rates of TDS for major nature of payments for the Financial Year 2010-11
Particulars Rates from 1.4.10 to 31.03.2011
Section Nature of Payment Criteria for Deduction

(payment in excess of) upto

30th June 2010
Criteria for Deduction (payment in excess of) w.e.f. 1st July 2010 If the recipient is a Company, Co- operative Society, Firm If recipient is an Indivudual or HUF
194 A Interest from a Banking Company Rs.10,000/- p.a Rs.10,000/- p.a 10.00 10.00
194 A Interest other than from a Banking

we are a private limited company and have taken on rent a property from an individual from for a rent of Rs. 1,50,000 per month in hyderabad. What is the TDS we have to deduct and aso let me know if we have to pay any service tax on this rental

i have rented out a commercial property for 19,000 per monyh since december 2009. what is the TDS amount that can be educted from the rent. also please suggest me if i do agree to deduct the TDS from the rent or shall i take the entire rent and then file tax return for the income

My mother has rented our parental house to a company in july, 2010 for the rent amount of 20,000 per month. After three months of paying rent, the company has deducted tds at the rate of 10.3% for the previous three months also. Kindly guide if the company needs to deduct tds or we can
ask them to give us the entire amount since she does not have any other income and the tds amount also do not go beyond 180000/-

DEAR SIR
OUR COMPANY DEDUCTING TDS UNDER SECTION 194J WHEN MAKING PAYMENTS TO HOSPITALS FOR HOSPITALIZATION OF OUR EMPLOYEES IN EMPANELED HOSPITALS APPROVED BY US .IF THEY HAVE PRODUCED TDS EXEMPTION CERTIFICATE AT THE TIME OF MAKING PAYMENTS THEN WE WILL NOT DEDUCT.NOWADAYS ALOT OF ARGUMENTS ARE TAKING PLACE BETWEEN OUR CO AND HOSPITALS FOR JUSTIFYING THE SAME.
HOW CAN I GIVE CORRECT REPLY & TELL US LIST OF PROFESSIONAL SERVICES UNDER 194 J ALSO?
NAVANEETH
AAO FIN/
BHEL
KOLKATA

Sir, I am a life insurance advisor. The company deducts income tax and service tax on the commission payable. Income tax deducted can be got refunded by making savings and filing IT returns. What about the service tax deducted? The commission paid by company is from the premium paid by the customer, from whom service tax etc are being deducted alongwith other chares of the scheme. From that premium amount I get commission, for which again service tax is deducted? Is it justified? Is this not a double jeopardy? can I get that amount refunded? Pl advice.

IS TDS TO BE DEDUCTED ON HOTEL ACCOMODATON GIVEN BY THE COMPANY TO EMPLOYEES WHO HAVE COME FROM OTHER CITIES FOR TRAINING ETC. SHOULD WE DEDUCT TDS AND PAY THE BILL. IF IT IS PAYABLE PLEASE CONFIRM WHETHER WE NEED TO DEDUCT TDS UNDER RENT OR CONTRACT.

we had arrange local person to shifting office (Labour charges & transportation charges) & he charged Rs.36,000/- for same. But we pay hole amount in cash without deduct TDS. Is it ok? What the limit to pay cash without deduct TDS?

If any Vendor charge VAT on the bill value & if the job related any contract can we deduct TDS as per the Contract Rate / Also let me know can we deduct TDS on the job value or entire bill value(Which is includes VAT).

an foreign employee with a indian employment contract (under employment visa for 1 year) paid directly to a service flat company the monthly bill without deducting TDS. This foreign employee sought reimbursement from the indian company. Apart that this reimbursement forms a monetary valuation to be added to the taxable salary, is there a ‘tax legal error’ in not first, deducting the TDS , and secondly in the company reimbursing the foreign employee 100% of the hotel expenses made. Also note that the hotel bill is in name of the company, but receipt of payment in the name of the employee.

Tds rates are same for Financial year 2009-10 and for financial year 2010-11 but there is a change in threshold limit of exemption. Please read the post carefully you will come to know of the amendments.

Since the New rates of TDs applicable w.e.f. 1st July 2010.Hence upto June 2010 you will have to deduct TDS on rent as per provisions of section 194I even though rent is below 1.80 lacs but should be exceeding 1.20 lacs.